In cash terms the top 10% own £5.0 trillion of UK total household wealth of £11.1 trillion – that’s 44.8 per cent (over 2012-14). Last time (2010-12), it was £4.1tn of £9.4tn – so 43.6%. This increased share of 1.2 percentage points (ppts) is very hefty relative to the past three…Read more…
Mixed messages on deflationary/disinflationary pressures
November CPI inflation at 0.1% following October at -0.1% was in line exactly with the Bank of England forecast in their November Inflation Report. But it seems highly likely that their projected December figure of +0.4% will be wrong. Global deflation…Read more…
A double-whammy of imbalance: London drives faster growth; finance and real estate drives London
The first regional GVA figures for 2014 show the usual story of growth shared across the country but disproportionately skewed toward London, which continues to account for an ever greater share of UK GDP. Ominously though, in London, the acceleration …Read more…
Osborne’s new (very modest) ‘Keynesian’ clothes
Paul Johnson of the IFS has rightly put a stop to the idea that the Spending Review (SR) signalled the end of austerity. But in a very modest way this event continued a ‘Keynesian’* turn. Yesterday I set out the accounting logic (here); the underlying macroeconomic logic could easily be regarded as…Read more…
Osborne commits to industrial strategy #SpendingReview
In his speech to Parliament today, the Chancellor, George Osborne said: “Businesses also need an active and sustained industrial strategy. That strategy launched in the last parliament continues in this one.” To be truly accurate, the strategy was launched in the parliament before last, with Peter…Read more…
A spectacular U-turn on tax credits, but working people needed more from the #SpendingReview
George Osborne was forced into a spectacular climb-down over his plans to cut tax credits in his Spending Review today. That’s a victory for decency, and the strong campaign run by civil society groups and unions to oppose the proposals. But by the end of the parliament many working people…Read more…
The UK Auto Industry and Europe
Jaguar Land Rover’s Castle Bromwich production line Professor David Bailey reflects on the impact of EU membership on the UK’s auto industry. The UK government likes to boast that the…Read more…
It’s time for real action to #SaveOurSteel
I was proud to speak in November 2015 in the Steel City, Sheffield, at a big rally in solidarity with the thousands of steelworkers fighting for their jobs, their livelihoods and their communities. Hundreds of workers and supporters came together to send a clear message to the government that we…Read more…
Fiscal fallacies (2): accounting identities and the case for government loan-expenditures
Related to the fallacy of deficit spending are arguments around accounting identities and the ‘principle of sectoral balancing’. The economics is extended from the government’s balance (its deficit or surplus), to the balances for all ‘sectors’, i.e. households, companies and the rest of the world….Read more…
Fiscal fallacies (1): Keynes wanted ‘Government loan-expenditures’, NOT deficit spending
For decades Keynes’s approach to public spending has been understood as ‘deficit spending’. But this reflects a serious misunderstanding of his practical initiatives and the associated theoretical reasoning and justification. Undoubtedly choosing his language with great care, Keynes consistently…Read more…
UK exports to China collapse by 40 per cent
UK exports to China appear to have peaked in 2014Q3 at £4.2bn; in 2015Q3 the figure was £2.5bn, a fall of 40 per cent. The chart shows quarterly figures. UK exports to China, £ million The implications for the condition of the Chinese economy are plain. While monthly figures are more volatile,…Read more…
U.S.A. : No Guarantee Of Trade If UK Leaves EU
The United States trade negotiator Michael Froman, who is leading the talks for the USA on TTIP and lead the talks on TPP says the USA would not be positive towards negotiating a separate free trade…Read more…
Steel crisis goes to the heart of UK industrial policy
The steel industry is not alone. Right across the energy intensive industries there are profound and well founded concerns over plant closures, jobs losses, higher energy costs than competitors face, and a lack of a common vision for UK manufacturing. …Read more…
Economy growing at around half the pace of last year
At 0.5%, today’s preliminary estimate of GDP quarterly growth in 2015 Q3 was a little weaker than expected (0.6%), down from 0.7% in Q2, and continued the run of below-par growth throughout 2015. Comparing with the same quarter of last year, growth was 2.3%. Looking at the measure of GDP excluding…Read more…
Ex-Federal Reserve boss rejects the Chancellor’s approach to spending cuts and surplus legislation
Yesterday was a bad day for George Osborne. After the Newsnight coverage of the defeat in the House of Lords, Evan Davies introduced (here at 20:25 mins) the previous Chairman of the Federal Reserve, Ben Bernanke (in the UK to promote his memoirs). Ex-bosses of central banks can speak more freely…Read more…
Borrowing’s in line with latest forecast, but over four times higher than originally planned
At the half-way point of the financial year (April to September 2015), the government has borrowed £36.4bn. At the same point last year, borrowing was £44.9bn, so the improvement on the year is 18.9%. For the year as a whole the OBR forecast borrowing of £69.5bn in 2015/16, a reduction of 22%…Read more…
OBR wrong to continue absolving Osborne’s polices for a deficit now 3x larger than planned
TUC has argued that the economy and public finances were derailed over the coalition years because government spending cuts had a larger-than-expected impact on the wider economy (see e.g. blog, paper). Earlier this week the Office for Budget Responsib…Read more…
Involving workers in key business decisions? The European way
At its 13th Congress held in Paris earlier this month, the European Trade Union Confederation (ETUC) launched an initiative for greater workplace democracy. In addition to promoting a better framework for worker information and consultation, the ETUC r…Read more…
Redcar closure defines government industrial policy
The Chancellor’s industrial policy is defined by deeds not words. Defining moments since May 2015 include the closure of our last three coal mines (2,100 jobs), two of the UK’s largest solar power firms (1,100 jobs) and SSI’s steel plant at Redcar (2,100 jobs). One common thread is a will, or the…Read more…
Digital Disruption or Digital Dividend?
It was a pleasure to speak at a fringe meeting on the digital economy, organised by Policy Network, at this year’s Labour Party Conference. I haven’t spoken or written on this subject before, so here are my slightly adapted comments to the meeting. “It is sometimes argued that the widespread…Read more…